M.C.Desai, C.J. - (1.) The following question has been referred to this Court for its opinion by the Judge (Revisions) Sales Tax: Whether red lead and zinc oxide are covered by the term 'dyes and colours' within the meaning of the Notification No. ST.-1429/X-1012-1948, dated 30th March, 1949, or fall under the head of 'chemicals of all kinds' under the Notification No. ST-117-X-923-1948, dated 8th June, 1948, under the U. P. Sales Tax Act.
(2.) The question is for assessment of the sales tax for the years 1950-51 and 1952-53. The assessee is a manufacturer of glassware and dealer in glassware, zinc oxide and red lead in Firozabad, which is well-known for its bangle industry. It imports zinc oxide and red lead, uses some in manufacturing glass and sells the rest as a part of its business. Zinc oxide in known popularly as safeda and red lead as sindur. Under Notification No. ST-117/X-923-1948, dated June 8, 1948, issued by the State Government in exercise of the powers conferred by Section 3-A of the Act, the State Government have directed that proceeds of sale of the goods entered in the Schedule attached thereto would not be included in the turnover of any dealer, except at the point in the series of sales by successive dealers mentioned in the Schedule. The relevant entries in the schedule are : 10. "Dyes, colours, and the compositions thereof". 11. "Chemicals of all kinds".
(3.) The notification came into effect on 9th June, 1948. It was amended with effect from 30th March, 1949, by a Notification No. ST-1429/X- 1012-1948, and "dyes, colours and the compositions thereof are to be taxed on all points of sale at a certain rate. This rate is lower than the rate at which these goods were to be taxed at a single point under the earlier notification. A controversy arose between the assessee and the Sales Tax Authorities in respect of the rate to be applied to the turnover in respect of zinc oxide and red lead sold by the assessee during the two assessment years. The assessee claimed that they were colours and, therefore, came within the scope of the second notification, whereas the Sales Tax Authorities claimed that they were chemicals and were governed by the earlier notification. The Sales Tax Officer held them to be chemicals and not dyes or colours, but did not assign any reasons for his view. The Judge (Appeals) agreed with it and did not give any reasons. The Judge (Revisions) agreed with them and the view taken by him was that these articles are not by their nature dyes or colours and that they are also not used as such. He seemed to be of the opinion that they are pigments and that pigments are not dyes ; he did not consider whether pigments are colours or not. Then at the instance of the assessee he referred the above question.;